European case law has repeatedly examined the concept of a “passive” fixed establishment in an attempt to determine its contours. The judgment commented on here adds to the debate:
- For a fixed establishment to exist, it is not necessary to have human or technical resources of one’s own. If these human or technical resources belong to a third party, it is necessary that the company has the power to use these resources as if they were its own.
- The same means cannot be used both to provide as well as to receive the same services
The sales representation and marketing services provided by the Romanian company are received by the German company, which then uses its own human and technical resources located in Germany to conclude and execute sales contracts with distributors of its products in Romania. Therefore, the German company does not have a permanent establishment in Romania.
Source vatdesk.eu
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